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Let’s face it. A lot of us are at home and we could use some extra money. But what if I told you that you could make $1730 in 5 minutes? Would you believe me? Now, I’m sure you all have heard of the saying, let your money work for you. You hear it all the time, but do you really know how to do it? So in this video, I’m going to show you how you can sell covered calls on your phone, which I kid you not, only takes 5 minutes every Monday morning. This is one of the best strategies I used to let my money work for me and one of the strategies I used to reach financial freedom.
"But what if I told you that you could make $1730 in 5 minutes?"
Okay, before I show you how to sell covered calls and make the $1730, you need to first know what it means to sell a covered call. In a nutshell, you are basically going to buy 100 shares of a stock and sell the right to someone for them to buy the shares away from you at a certain price and date that you choose. In return, you’re paid a premium. And guys, this premium is amazing because this is what I did over and over again which allowed me to quit my job as a public school math teacher.
Now, don’t think that you can sell covered calls on any stocks because if you don’t fully understand the reasoning behind it and which stocks are the best stocks to use, you may actually lose money. But if you do it right, like with what I teach all of my exclusive members, you can easily make $800-$8000 a month, which might finally give you the freedom of quitting your 9-5 job and pursuing something else you love, or giving you the ability to financially help other people around you.
August 9, 2020 | Covered Call
A. CSCO- $47.60
Capital needed: $4,760
Step 1: Buy 100 Shares
Step 2: Sell a covered call
Expiration Date: September 4, 2020
Strike: $47.50 (Willing to sell the 100 shares at this price)
Premium: $173
Two Scenarios at Expiration
a. If CSCO is above $47.50 = Keep $173 premium and sell all your shares for $10 less.
b. If CSCO is below $47.50 = Keep $173 premium and sell another covered call to collect more premium next month
How much did you earn?
If called away with capital gains: $163/$4760= 3.4% return
If not called away: $173/$4760= 3.6% return
Downside protection and lowered cost basis
$47.60 - $1.73 = $45.87 per share
Scaling
1 Contract = $173 (Capital needed: $4,730)
10 Contracts = $1,730 (Capital needed: $47,300)